MSCI slipped by 0.28% to 933.15, pressured by a strengthening dollar and Federal Reserve commentary. Fed Chair Jerome Powell said it is too early to discuss a rate cut in September. Dow Jones dropped by 0.38%, S&P 500 fell by 0.12%, while Nasdaq managed a 0.15% gain. Copper prices weakened as the US announced potential new tariffs. The Stoxx 600 rose by 0.3%, heading for a 1.6% monthly gain in July.
The US dollar continues to strengthen, with global markets showing a restrained reaction to the Fed meeting outcome. Powell cooled investor hopes by stating that talk of a rate cut is premature. This disappointed market participants who had anticipated a dovish shift as early as this autumn.
Following its two-day meeting, the Fed kept the key interest rate steady. Despite signs of slowing economic momentum, the US central bank provided no clear guidance on the timing of a possible rate reduction. Moreover, two committee members appointed by the current president dissented, maintaining their call for looser monetary policy.
If markets still held out hope for a shift, Powell's press conference dashed them. He emphasized that any rate cut decision would be based on a thorough analysis of economic data, especially ahead of the next meeting in September.
Commodities markets faced additional pressure from Washington's announcement of significant trade tariffs. The news triggered a sharp drop in copper prices.
Following Powell's remarks, the US dollar continued to gain ground. The US dollar index, which tracks the performance of the greenback against major world currencies, climbed by 1.01% to reach 99.89.
Amid the dollar's rise, the euro declined by 1.13% to $1.14. The British pound fell by 0.78% to $1.32. The Canadian dollar slipped by 0.52%, settling at $1.38 per US dollar.
The Japanese yen also weakened: the dollar rose by 0.67% against it, reaching 149.43. The Swiss franc depreciated by nearly 1%, with the dollar climbing to 81.14.
US Treasury yields continued their steady bullish run, driven by uncertainty created by Powell, who failed to deliver clear signals regarding a potential key rate cut in September.
Futures contracts for US crude added 1.14%, rising by 79 cents to reach $70 per barrel. Brent crude also advanced by 1.01%, or 73 cents, hitting $73.24.
Meanwhile, former President Donald Trump signed an executive order imposing steep 50% tariffs on specific copper products. The new measures will take effect on August 1. The market reacted instantly: copper futures on the US Comex exchange plummeted by 19.5%. At the same time, the premium over the London benchmark sharply narrowed, having previously widened on expectations of advantages for US copper producers.
The US administration continues to tighten trade policy. President Donald Trump signed an executive order to impose 50% tariffs on goods imported from Brazil. In addition, it was previously announced that imports from India would be subject to 25% tariffs. Both measures are set to take effect on August 1. These steps followed the fruitless conclusion of another round of US-China trade negotiations on Tuesday.
Following the Federal Reserve's decision and Jerome Powell's subsequent comments, gold prices continued to decline. The precious metal had already been under pressure due to strong US macroeconomic data. As a result, spot gold fell by 1.58%, reaching $3,273.59 per troy ounce.
Despite a tense trade agenda, European stock markets ended Thursday in positive territory. Investors reacted to a wave of upbeat corporate news and closely followed a series of last-minute trade initiatives being signed.
By morning GMT, the pan-European Stoxx 600 index gained 0.3%. Based on current dynamics, it is on track to end July with a 1.6% gain, supported by easing concerns over global trade, stable macroeconomic data from the US and Europe, and generally strong corporate earnings.
Ahead of the August 1 deadline, Donald Trump announced a series of new trade initiatives. These include a revision of copper tariffs, import restrictions on goods from South Korea, Brazil, and India, as well as the cancellation of certain preferential regimes for small-volume overseas shipments.
European banks continue to show confident growth. The eurozone bank index rose by 1%, largely driven by French lender Societe Generale, which revised its annual profit outlook upward. The bank's shares jumped by 7%, becoming one of the top performers in the sector.
The financial results of European banks were mixed. British bank Standard Chartered reported that its pre-tax profit for the first half of the year exceeded market expectations. At the same time, Spanish BBVA posted a decline in net profit for the second quarter, slightly dampening investor enthusiasm.
Oil and gas giant Shell pleased the market: quarterly profit exceeded analyst expectations, and the share buyback program remained unchanged. As a result, the company's stock rose by 2.9%. Shares of competitor BP also gained slightly.
Top beer producer Anheuser-Busch InBev came into the spotlight after reporting weak sales. The company was let down by markets in China and Brazil, where consumption fell. The result was a 10.2% drop in its share price, one of the most notable moves of the day.
Investors are closely watching upcoming earnings reports from major US tech companies. Microsoft and Meta have posted impressive results, which could significantly influence Thursday's trading in New York. The focus now shifts to Apple and Amazon, whose reports are the next major indicators for the market.
